1. What is insurance litigation?
Insurance litigation relates to all legal actions involving insurance companies, policyholders ( insured ) or insurance claims. Often, a legal action arises from an insurance policy that has been issued to a policyholder by an insurance company. This can be as a result of a dispute over an insurance company’s responsibility or a policyholder’s obligations under a policy. There are many different types of insurance policies and accordingly the nature of insurance litigation can differ greatly. For example, on the one hand a policyholder may sue his insurance company if he feels the company is not honouring its obligations in terms of the policy whilst on the other hand an insurance company may sue a policyholder whom it feels has unjustly received money under a policy.
However it goes further. Quite often an action is instituted on behalf of a policyholder by an insurance company in the policyholder’s name against a third party or action is instituted against a policyholder and such action defended by the insurance company on behalf of the policyholder. Mostly this happens where damages has been caused to a policyholder or by him. The cost of litigation in these cases are normally borne by the insurance company.